Defending the ASP
PrintMedia InBox: How do the mergers and acquisitions within the ASP market affect the broader mission of the model?
Oliver Pflug: I think what's going on in the market place helps the ASP model. It has to do with the notion of scale. The ASP model assumes that you have a lot of customers running on the same hardware and software. The current acquisitions help concentrate market demand with fewer suppliers becoming more viable. The situation you had six or 12 months ago with dozens of vendors going after this marketplace just wasn't sustainable.
InBox: How will the market change six or 12 months from now?
Pflug: Within a six month period you will have a handful of viable ASP service providers. There will obviously be print suppliers (Donnelley, Quad/Graphics and so forth) that try to develop in-house, but in terms of the pure ASPs, I'll be surprised if you have more than four or five. Of course, there will always be opportunistic players coming and going, but I would not include those among the four or five. Markets have a way of weeding out the marginal propositions—the ones where value doesn't match the cost of providing the solutions. I think the four or five that are left over will be long-term players. This will all happen pretty quickly.
InBox: If so, and based on your own company model, how will these ASP's succeed?
Pflug: In our context, what has been successful is the fact that we have a technology that is extremely flexible. What that means is that a print supplier can go into any large- or medium-sized corporation and take any print products and configure them on the service. There's no limitation in the system in terms of handling only certain types of products or jobs. It makes suppliers successful because they don't have to worry about what they're going to encounter. It makes us successful because of the sheer breadth of products we can handle, which means more system usage. What has also been successful for us is our support model, an issue which the industry and the media have focused very little on.